It would take too much work to transform your hypothesis into something analogous to what's happening with Greece, so I'll just point out the major leak in the abstraction.
In your example my friend and I are two economically independent entities. Yes, I care about him on an emotional level, but not lending him money will not affect my income. This isn't so when you talk about Greece and the EU. Also, as any developed economy, Greece has a large economic capacity - it has advanced industry, technology, tourism, education, etc. In short, it has a lot of assets, so lending money to it would be more like lending money to my gambling friend who just happens to be an immortal Stu Ungar - yes, he's wildly dysfunctional, but the potential ROI is almost always worth it.
OK, and I think I was exaggerating and being unfair to the Greeks - they are not gambling drunks, although I am annoyed at many of them throwing a tantrum because they have to repay money that was spent by their government in their country, and not in some foreign adventure.
The main point I was trying to make, though, is that other people's money doesn't get spent efficiently. I've been involved in some EU-financed programs, and the productivity of those compared to private sector or even regular government contracts is in the pits. Taxpayer money doesn't always get spent efficiently, either, but at least there is some kind of accountability of the government to the citizens. The idea that Greece would take money that comes from other countries, and spend it on these really great stimulus programs, doesn't pass the skepticism barrier for me.
I wildly disagree with the way my country is borrowing and spending money. Do I not get to complain about that because the money is being spent by my government in my country?
Few people even understand the issues associated with economics at that level, much less what is right or wrong. It is also pretty safe that, around the world, nobody cares until it affects their wallets directly, which is when e Greeks started complaining.
Expecting decades of mismanagement to get sucked up overnight and not have anybody complain probably isn't reasonable.
Point taken. I agree that there is a lot of waste of EU funds. I could tell you stories about my native Bulgaria that would surely make you very angry.
I still think this is a separate problem. I think right now it would be more efficient to stimulate the Greek economy than it would be to just bail it out with austerity provisions. The analogy would be to finance your friend to go to school for a year or two and earn a degree to get a better job and pay you back - he wins (gets money in both the short and long-term) and you win (get your money back and a functional friend).
the Bulgarian state nearly went bankrupt in 78 as a result of stupid state-planned 'investment'. The debts which were repaid with the strategic gold reserve which were basically the savings tucked away for about a hundred years.
The Communist government continued to spend unsustainably in IT (it was unsustainable because it was based on non-marked agreements with COMECON countries) and other sectors. Salaries were raised, people bought more Lada cars, times were good.. for a while. The USSR which gave us petrol to resell collapsed and we were unable to find markets for our goods (which apart from weapons were greatly inferior on the open market).
So we had to pay back the debts with even crueler austerity measures. But it wasn't the worst thing. The economy was unproductive. The living levels collapsed in and they reached 89 levels again in 03. Oh and 1 million mostly young Bulgarians left the country.
So instead of getting its act together the government just ignored the problems, made things comfortable for the populace and even worse problems came.
Had the Communists liberalized the economy and be sure to pay debts in the 80s it wouldn't happen.
But we didn't learn the lessons of fiscal responsibility. The Socialist government of Jean Videnov undid the austerity measures and got into an even huger mess (never mind that enterprises continued to fail). Yes, he also yet huge money printing to begin which, the Greeks don't have to deal with, so we can leave this out.
Our governments have more or less learned their lesson, even the former Communist, but the temptation is huge.
The Greeks don't have such recent history and if they don't restructure only a much bigger mess will come.
In your example my friend and I are two economically independent entities. Yes, I care about him on an emotional level, but not lending him money will not affect my income. This isn't so when you talk about Greece and the EU. Also, as any developed economy, Greece has a large economic capacity - it has advanced industry, technology, tourism, education, etc. In short, it has a lot of assets, so lending money to it would be more like lending money to my gambling friend who just happens to be an immortal Stu Ungar - yes, he's wildly dysfunctional, but the potential ROI is almost always worth it.